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Hanover Insurance Group, Inc (The) -- Moody’s rates Hanover’s senior notes Baa2; outlook stable

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<p style="position:absolute;top:162px;left:108px;white-space:nowrap" class="ft00"><b>Rating Action:&#160;</b></p>

<p style="position:absolute;top:162px;left:252px;white-space:nowrap" class="ft01"><b>Moody’s rates Hanover’s senior notes Baa2; outlook</b></p>

<p style="position:absolute;top:186px;left:108px;white-space:nowrap" class="ft01"><b>stable</b></p>

<p style="position:absolute;top:233px;left:108px;white-space:nowrap" class="ft02"><b>19 August 2020</b></p>

<p style="position:absolute;top:266px;left:108px;white-space:nowrap" class="ft03">New York, August 19, 2020 -- Moody’s Investors Service, (“Moody’s”) has assigned a Baa2 rating</p>

<p style="position:absolute;top:286px;left:108px;white-space:nowrap" class="ft03">to $300 million of 10-year senior notes to be issued by The Hanover Insurance Group, Inc. off its</p>

<p style="position:absolute;top:305px;left:108px;white-space:nowrap" class="ft03">multi-purpose shelf registration. The company intends to use the net proceeds from the offering to</p>

<p style="position:absolute;top:325px;left:108px;white-space:nowrap" class="ft03">redeem $175 million of subordinated notes that mature in 2053 and for general corporate purposes.</p>

<p style="position:absolute;top:344px;left:108px;white-space:nowrap" class="ft03">At the same time, Moody’s has assigned provisional ratings to Hanover’s shelf registration including</p>

<p style="position:absolute;top:364px;left:108px;white-space:nowrap" class="ft04">provisional senior unsecured debt at (P)Baa2. The rating outlook for Hanover is stable.<br/>RATINGS RATIONALE<br/>For Hanover and other P&amp;C insurers, the coronavirus-related economic downturn is constraining</p>

<p style="position:absolute;top:445px;left:108px;white-space:nowrap" class="ft03">premium growth, raising claim costs in certain business lines and adding volatility to investment</p>

<p style="position:absolute;top:465px;left:108px;white-space:nowrap" class="ft03">performance. Hanover reported net income of $75 million for the first half of 2020, down from $196</p>

<p style="position:absolute;top:484px;left:108px;white-space:nowrap" class="ft03">million for the prior-year period, primarily due to elevated catastrophe losses and investment losses.</p>

<p style="position:absolute;top:504px;left:108px;white-space:nowrap" class="ft03">The company reported catastrophe losses of $186 million in the first six months of 2020, up from $99</p>

<p style="position:absolute;top:523px;left:108px;white-space:nowrap" class="ft03">million in the prior year period primarily from storm and hail events in the Midwest and Southeast, as</p>

<p style="position:absolute;top:543px;left:108px;white-space:nowrap" class="ft03">well as civil unrest-related property claims and $19 million of losses related to the coronavirus. While</p>

<p style="position:absolute;top:562px;left:108px;white-space:nowrap" class="ft03">Hanover’s reported combined ratio was almost unchanged at 95.7% in the first half of 2020, the</p>

<p style="position:absolute;top:582px;left:108px;white-space:nowrap" class="ft03">underlying combined ratio, which excludes catastrophes and prior-year development, improved to</p>

<p style="position:absolute;top:601px;left:108px;white-space:nowrap" class="ft03">87.7% from 91.4% in the prior year period, partially due to favorable personal auto results. Moody's</p>

<p style="position:absolute;top:621px;left:108px;white-space:nowrap" class="ft03">expects the company will limit its discretionary spending through the downturn and maintain good</p>

<p style="position:absolute;top:640px;left:108px;white-space:nowrap" class="ft05">capital adequacy and strong liquidity.<br/>Hanover’s ratings reflect the company's good market position in US small-to-midsize commercial</p>

<p style="position:absolute;top:690px;left:108px;white-space:nowrap" class="ft03">lines, low-to-moderate hazard specialty, and personal lines businesses. Other strengths include</p>

<p style="position:absolute;top:710px;left:108px;white-space:nowrap" class="ft03">strong relationships with its targeted network of independent agents and brokers and its investment</p>

<p style="position:absolute;top:729px;left:108px;white-space:nowrap" class="ft03">in automation and predictive modeling. The company has reported good profitability over the past</p>

<p style="position:absolute;top:749px;left:108px;white-space:nowrap" class="ft03">three years with combined ratios averaging in the mid-90% range. These positive factors are partly</p>

<p style="position:absolute;top:768px;left:108px;white-space:nowrap" class="ft03">offset by Hanover's significant gross catastrophe exposure, which is partially mitigated by extensive</p>

<p style="position:absolute;top:788px;left:108px;white-space:nowrap" class="ft03">reinsurance, above-average underwriting leverage, and exposure to casualty business, which has</p>

<p style="position:absolute;top:807px;left:108px;white-space:nowrap" class="ft05">greater pricing and reserve risk.<br/>FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING<br/>According to Moody's, factors that could lead to a rating upgrade include: strengthening of risk-</p>

<p style="position:absolute;top:887px;left:108px;white-space:nowrap" class="ft03">adjusted capitalization (e.g., gross underwriting leverage consistently below 3x); reduction in gross</p>

<p style="position:absolute;top:907px;left:108px;white-space:nowrap" class="ft03">and net catastrophe exposure; sustained strength in operating profitability with EBIT coverage of</p>

<p style="position:absolute;top:926px;left:108px;white-space:nowrap" class="ft05">interest above 6x; and, adjusted debt-to-capital consistently below 20%.<br/>Conversely, factors that could lead to a rating downgrade include: gross underwriting leverage above</p>

<p style="position:absolute;top:976px;left:108px;white-space:nowrap" class="ft03">4x; a significant increase in catastrophe exposure; adjusted debt-to-capital ratio consistently above</p>

<p style="position:absolute;top:996px;left:108px;white-space:nowrap" class="ft05">25%; EBIT coverage of interest less than 4x; or, a decline in shareholders' equity by more than 10%.<br/>Moody's has assigned the following ratings for The Hanover Insurance Group, Inc.:</p>

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<p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft05">- senior unsecured debt at Baa2<br/>- provisional senior unsecured shelf at (P)Baa2<br/>- provisional subordinate shelf at (P)Baa3<br/>- provisional preferred shelf at (P)Ba1<br/>- provisional preferred shelf (non-cumulative) at (P)Ba1.<br/>The rating outlook for Hanover remains unchanged at stable.<br/>Hanover ranks among the top 30 property and casualty insurers in the United States, offering P&amp;C</p>

<p style="position:absolute;top:315px;left:108px;white-space:nowrap" class="ft03">insurance products to individuals and business owners through a targeted network of independent</p>

<p style="position:absolute;top:334px;left:108px;white-space:nowrap" class="ft03">agents. For the first six months of 2020, Hanover reported net premiums written of $2.2 billion and</p>

<p style="position:absolute;top:354px;left:108px;white-space:nowrap" class="ft03">net income of $75.2 million. As of June 30, 2020, shareholders' equity was approximately $3.1</p>

<p style="position:absolute;top:373px;left:108px;white-space:nowrap" class="ft05">billion.<br/>The principal methodology used in these ratings was Property and Casualty Insurers</p>

<p style="position:absolute;top:423px;left:108px;white-space:nowrap" class="ft03">Methodology published in November 2019 and available at&#160;</p>

<p style="position:absolute;top:423px;left:522px;white-space:nowrap" class="ft06">https://www.moodys.com/</p>

<p style="position:absolute;top:443px;left:108px;white-space:nowrap" class="ft06">researchdocumentcontentpage.aspx?docid=PBC_1187352</p>

<p style="position:absolute;top:443px;left:520px;white-space:nowrap" class="ft03">. Alternatively, please see the Rating</p>

<p style="position:absolute;top:462px;left:108px;white-space:nowrap" class="ft04">Methodologies page on www.moodys.com for a copy of this methodology.<br/>REGULATORY DISCLOSURES<br/>For further specification of Moody’s key rating assumptions and sensitivity analysis, see</p>

<p style="position:absolute;top:544px;left:108px;white-space:nowrap" class="ft03">the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure</p>

<p style="position:absolute;top:563px;left:108px;white-space:nowrap" class="ft03">form. Moody’s Rating Symbols and Definitions can be found at:&#160;</p>

<p style="position:absolute;top:563px;left:551px;white-space:nowrap" class="ft06">https://www.moodys.com/</p>

<p style="position:absolute;top:583px;left:108px;white-space:nowrap" class="ft06">researchdocumentcontentpage.aspx?docid=PBC_79004</p>

<p style="position:absolute;top:583px;left:503px;white-space:nowrap" class="ft03">.</p>

<p style="position:absolute;top:613px;left:108px;white-space:nowrap" class="ft03">For ratings issued on a program, series, category/class of debt or security this announcement</p>

<p style="position:absolute;top:633px;left:108px;white-space:nowrap" class="ft03">provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or</p>

<p style="position:absolute;top:652px;left:108px;white-space:nowrap" class="ft03">note of the same series, category/class of debt, security or pursuant to a program for which the</p>

<p style="position:absolute;top:672px;left:108px;white-space:nowrap" class="ft03">ratings are derived exclusively from existing ratings in accordance with Moody's rating practices.</p>

<p style="position:absolute;top:691px;left:108px;white-space:nowrap" class="ft03">For ratings issued on a support provider, this announcement provides certain regulatory disclosures</p>

<p style="position:absolute;top:711px;left:108px;white-space:nowrap" class="ft03">in relation to the credit rating action on the support provider and in relation to each particular credit</p>

<p style="position:absolute;top:730px;left:108px;white-space:nowrap" class="ft03">rating action for securities that derive their credit ratings from the support provider's credit rating.</p>

<p style="position:absolute;top:750px;left:108px;white-space:nowrap" class="ft03">For provisional ratings, this announcement provides certain regulatory disclosures in relation to the</p>

<p style="position:absolute;top:769px;left:108px;white-space:nowrap" class="ft03">provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent</p>

<p style="position:absolute;top:789px;left:108px;white-space:nowrap" class="ft03">to the final issuance of the debt, in each case where the transaction structure and terms have not</p>

<p style="position:absolute;top:808px;left:108px;white-space:nowrap" class="ft03">changed prior to the assignment of the definitive rating in a manner that would have affected the</p>

<p style="position:absolute;top:828px;left:108px;white-space:nowrap" class="ft03">rating. For further information please see the ratings tab on the issuer/entity page for the respective</p>

<p style="position:absolute;top:847px;left:108px;white-space:nowrap" class="ft05">issuer on www.moodys.com.<br/>For any affected securities or rated entities receiving direct credit support from the primary entity(ies)</p>

<p style="position:absolute;top:897px;left:108px;white-space:nowrap" class="ft03">of this credit rating action, and whose ratings may change as a result of this credit rating action, the</p>

<p style="position:absolute;top:916px;left:108px;white-space:nowrap" class="ft03">associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach</p>

<p style="position:absolute;top:936px;left:108px;white-space:nowrap" class="ft03">exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated</p>

<p style="position:absolute;top:955px;left:108px;white-space:nowrap" class="ft05">entity, Disclosure from rated entity.<br/>The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no</p>

<p style="position:absolute;top:1005px;left:108px;white-space:nowrap" class="ft03">amendment resulting from that disclosure.</p>

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<p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">These ratings are solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited</p>

<p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft05">Credit Ratings available on its website www.moodys.com.<br/>Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the</p>

<p style="position:absolute;top:183px;left:108px;white-space:nowrap" class="ft05">related rating outlook or rating review.<br/>Moody’s general principles for assessing environmental, social and governance (ESG) risks in our</p>

<p style="position:absolute;top:233px;left:108px;white-space:nowrap" class="ft03">credit analysis can be found at&#160;</p>

<p style="position:absolute;top:233px;left:325px;white-space:nowrap" class="ft06">https://www.moodys.com/researchdocumentcontentpage.aspx?</p>

<p style="position:absolute;top:252px;left:108px;white-space:nowrap" class="ft06">docid=PBC_1133569</p>

<p style="position:absolute;top:252px;left:256px;white-space:nowrap" class="ft03">.</p>

<p style="position:absolute;top:282px;left:108px;white-space:nowrap" class="ft03">The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s</p>

<p style="position:absolute;top:302px;left:108px;white-space:nowrap" class="ft03">affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt</p>

<p style="position:absolute;top:321px;left:108px;white-space:nowrap" class="ft03">am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No</p>

<p style="position:absolute;top:341px;left:108px;white-space:nowrap" class="ft03">1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the</p>

<p style="position:absolute;top:360px;left:108px;white-space:nowrap" class="ft05">Moody’s office that issued the credit rating is available on www.moodys.com.<br/>Please see www.moodys.com for any updates on changes to the lead rating analyst and to the</p>

<p style="position:absolute;top:410px;left:108px;white-space:nowrap" class="ft05">Moody's legal entity that has issued the rating.<br/>Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory</p>

<p style="position:absolute;top:460px;left:108px;white-space:nowrap" class="ft05">disclosures for each credit rating.<br/>Jasper Cooper, CFA</p>

<p style="position:absolute;top:510px;left:108px;white-space:nowrap" class="ft03">VP-Sr Credit Officer</p>

<p style="position:absolute;top:529px;left:108px;white-space:nowrap" class="ft03">Financial Institutions Group</p>

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<p style="position:absolute;top:465px;left:108px;white-space:nowrap" class="ft03">OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS,</p>

<p style="position:absolute;top:484px;left:108px;white-space:nowrap" class="ft03">ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE</p>

<p style="position:absolute;top:504px;left:108px;white-space:nowrap" class="ft03">RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S</p>

<p style="position:absolute;top:523px;left:108px;white-space:nowrap" class="ft03">CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT</p>

<p style="position:absolute;top:543px;left:108px;white-space:nowrap" class="ft03">COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR.</p>

<p style="position:absolute;top:562px;left:108px;white-space:nowrap" class="ft03">MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND</p>

<p style="position:absolute;top:582px;left:108px;white-space:nowrap" class="ft03">PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH</p>

<p style="position:absolute;top:601px;left:108px;white-space:nowrap" class="ft03">INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH</p>

<p style="position:absolute;top:621px;left:108px;white-space:nowrap" class="ft07">SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.<br/>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS</p>

<p style="position:absolute;top:663px;left:108px;white-space:nowrap" class="ft03">ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS</p>

<p style="position:absolute;top:683px;left:108px;white-space:nowrap" class="ft03">AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS,</p>

<p style="position:absolute;top:702px;left:108px;white-space:nowrap" class="ft03">ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT</p>

<p style="position:absolute;top:722px;left:108px;white-space:nowrap" class="ft03">DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER</p>

<p style="position:absolute;top:741px;left:108px;white-space:nowrap" class="ft03">PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED</p>

<p style="position:absolute;top:761px;left:108px;white-space:nowrap" class="ft03">BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH</p>

<p style="position:absolute;top:780px;left:108px;white-space:nowrap" class="ft03">INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER</p>

<p style="position:absolute;top:800px;left:108px;white-space:nowrap" class="ft03">TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED</p>

<p style="position:absolute;top:819px;left:108px;white-space:nowrap" class="ft03">FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM</p>

<p style="position:absolute;top:839px;left:108px;white-space:nowrap" class="ft03">OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S</p>

<p style="position:absolute;top:858px;left:108px;white-space:nowrap" class="ft07">PRIOR WRITTEN CONSENT.<br/>MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE</p>

<p style="position:absolute;top:901px;left:108px;white-space:nowrap" class="ft03">NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED</p>

<p style="position:absolute;top:920px;left:108px;white-space:nowrap" class="ft03">FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT</p>

<p style="position:absolute;top:940px;left:108px;white-space:nowrap" class="ft07">IN THEM BEING CONSIDERED A BENCHMARK.<br/>All information contained herein is obtained by MOODY’S from sources believed by it to be</p>

<p style="position:absolute;top:982px;left:108px;white-space:nowrap" class="ft03">accurate and reliable. Because of the possibility of human or mechanical error as well as other</p>

<p style="position:absolute;top:1002px;left:108px;white-space:nowrap" class="ft03">factors, however, all information contained herein is provided “AS IS” without warranty of any kind.</p>

<p style="position:absolute;top:1021px;left:108px;white-space:nowrap" class="ft03">MOODY'S adopts all necessary measures so that the information it uses in assigning a credit</p>

<p style="position:absolute;top:1041px;left:108px;white-space:nowrap" class="ft03">rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when</p>

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<p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot</p>

<p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft03">in every instance independently verify or validate information received in the rating process or in</p>

<p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft07">preparing its Publications.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p>

<p style="position:absolute;top:195px;left:108px;white-space:nowrap" class="ft03">representatives, licensors and suppliers disclaim liability to any person or entity for any indirect,</p>

<p style="position:absolute;top:215px;left:108px;white-space:nowrap" class="ft03">special, consequential, or incidental losses or damages whatsoever arising from or in connection</p>

<p style="position:absolute;top:234px;left:108px;white-space:nowrap" class="ft03">with the information contained herein or the use of or inability to use any such information, even if</p>

<p style="position:absolute;top:254px;left:108px;white-space:nowrap" class="ft03">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers</p>

<p style="position:absolute;top:273px;left:108px;white-space:nowrap" class="ft03">is advised in advance of the possibility of such losses or damages, including but not limited to:</p>

<p style="position:absolute;top:293px;left:108px;white-space:nowrap" class="ft03">(a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant</p>

<p style="position:absolute;top:312px;left:108px;white-space:nowrap" class="ft07">financial instrument is not the subject of a particular credit rating assigned by MOODY’S.<br/>To the extent permitted by law, MOODY’S and its directors, officers, employees, agents,</p>

<p style="position:absolute;top:355px;left:108px;white-space:nowrap" class="ft03">representatives, licensors and suppliers disclaim liability for any direct or compensatory losses</p>

<p style="position:absolute;top:374px;left:108px;white-space:nowrap" class="ft03">or damages caused to any person or entity, including but not limited to by any negligence (but</p>

<p style="position:absolute;top:394px;left:108px;white-space:nowrap" class="ft03">excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt,</p>

<p style="position:absolute;top:413px;left:108px;white-space:nowrap" class="ft03">by law cannot be excluded) on the part of, or any contingency within or beyond the control of,</p>

<p style="position:absolute;top:433px;left:108px;white-space:nowrap" class="ft03">MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers,</p>

<p style="position:absolute;top:452px;left:108px;white-space:nowrap" class="ft03">arising from or in connection with the information contained herein or the use of or inability to use</p>

<p style="position:absolute;top:472px;left:108px;white-space:nowrap" class="ft07">any such information.<br/>NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,</p>

<p style="position:absolute;top:514px;left:108px;white-space:nowrap" class="ft03">COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF</p>

<p style="position:absolute;top:534px;left:108px;white-space:nowrap" class="ft03">ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE</p>

<p style="position:absolute;top:553px;left:108px;white-space:nowrap" class="ft07">BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.<br/>Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s</p>

<p style="position:absolute;top:596px;left:108px;white-space:nowrap" class="ft03">Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and</p>

<p style="position:absolute;top:615px;left:108px;white-space:nowrap" class="ft03">municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s</p>

<p style="position:absolute;top:635px;left:108px;white-space:nowrap" class="ft03">Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s</p>

<p style="position:absolute;top:654px;left:108px;white-space:nowrap" class="ft03">Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from</p>

<p style="position:absolute;top:674px;left:108px;white-space:nowrap" class="ft03">$1,000 to approximately $2,700,000. MCO and Moody’s investors Service also maintain policies</p>

<p style="position:absolute;top:693px;left:108px;white-space:nowrap" class="ft03">and procedures to address the independence of Moody’s Investors Service credit ratings and credit</p>

<p style="position:absolute;top:713px;left:108px;white-space:nowrap" class="ft03">rating processes. Information regarding certain affiliations that may exist between directors of MCO</p>

<p style="position:absolute;top:732px;left:108px;white-space:nowrap" class="ft03">and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and</p>

<p style="position:absolute;top:752px;left:108px;white-space:nowrap" class="ft03">have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted</p>

<p style="position:absolute;top:771px;left:108px;white-space:nowrap" class="ft03">annually at&#160;</p>

<p style="position:absolute;top:771px;left:188px;white-space:nowrap" class="ft06">www.moodys.com</p>

<p style="position:absolute;top:771px;left:315px;white-space:nowrap" class="ft03">&#160;under the heading “Investor Relations — Corporate Governance —</p>

<p style="position:absolute;top:791px;left:108px;white-space:nowrap" class="ft07">Director and Shareholder Affiliation Policy.”<br/>Additional terms for Australia only: Any publication into Australia of this document is pursuant to the</p>

<p style="position:absolute;top:833px;left:108px;white-space:nowrap" class="ft03">Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited</p>

<p style="position:absolute;top:853px;left:108px;white-space:nowrap" class="ft03">ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136</p>

<p style="position:absolute;top:872px;left:108px;white-space:nowrap" class="ft03">972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale</p>

<p style="position:absolute;top:892px;left:108px;white-space:nowrap" class="ft03">clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access</p>

<p style="position:absolute;top:911px;left:108px;white-space:nowrap" class="ft03">this document from within Australia, you represent to MOODY’S that you are, or are accessing</p>

<p style="position:absolute;top:931px;left:108px;white-space:nowrap" class="ft03">the document as a representative of, a “wholesale client” and that neither you nor the entity you</p>

<p style="position:absolute;top:950px;left:108px;white-space:nowrap" class="ft03">represent will directly or indirectly disseminate this document or its contents to “retail clients” within</p>

<p style="position:absolute;top:970px;left:108px;white-space:nowrap" class="ft03">the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as</p>

<p style="position:absolute;top:989px;left:108px;white-space:nowrap" class="ft03">to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or</p>

<p style="position:absolute;top:1009px;left:108px;white-space:nowrap" class="ft03">any form of security that is available to retail investors.</p>

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<p style="position:absolute;top:114px;left:108px;white-space:nowrap" class="ft03">Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency</p>

<p style="position:absolute;top:133px;left:108px;white-space:nowrap" class="ft03">subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc.,</p>

<p style="position:absolute;top:153px;left:108px;white-space:nowrap" class="ft03">a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating</p>

<p style="position:absolute;top:172px;left:108px;white-space:nowrap" class="ft03">agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization</p>

<p style="position:absolute;top:192px;left:108px;white-space:nowrap" class="ft03">(“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-</p>

<p style="position:absolute;top:211px;left:108px;white-space:nowrap" class="ft03">NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated</p>

<p style="position:absolute;top:231px;left:108px;white-space:nowrap" class="ft03">obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit</p>

<p style="position:absolute;top:250px;left:108px;white-space:nowrap" class="ft03">rating agencies registered with the Japan Financial Services Agency and their registration numbers</p>

<p style="position:absolute;top:270px;left:108px;white-space:nowrap" class="ft07">are FSA Commissioner (Ratings) No. 2 and 3 respectively.<br/>MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including</p>

<p style="position:absolute;top:312px;left:108px;white-space:nowrap" class="ft03">corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated</p>

<p style="position:absolute;top:332px;left:108px;white-space:nowrap" class="ft03">by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to</p>

<p style="position:absolute;top:351px;left:108px;white-space:nowrap" class="ft03">MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging</p>

<p style="position:absolute;top:371px;left:108px;white-space:nowrap" class="ft07">from JPY125,000 to approximately JPY250,000,000.<br/>MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory</p>

<p style="position:absolute;top:413px;left:108px;white-space:nowrap" class="ft03">requirements.</p>

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